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CERTIFICATE OF FORMATION OF
TMFIVE PROPERTIES,LLC
A LIMITED LIABILITY COMPANY
This certificate of formation is submitted for filing pursuant to the applicable provisions of
the Texas Business Organizations Code.
Article I-Entity Name and Type
The name and type of filing entity being formed are: TMFIVE Properties, LLC, a Texas
limited liability company (hereinafter"Company").
Article II-Purpose
The purpose for which the Company is organized is any lawful purpose which may be
undertaken by the company in accordance with the applicable provisions of the Texas Business
Organizations Code.
Article III-Registered Office and Registered Agent
The initial registered agent is an individual resident of the state whose name is Terrence
Murphy. The business address of the initial registered agent and the initial registered office is: 4411
Hearst, College Station,Texas 77845.
Article IV-Principal Office
The address of the Company's principal office in this state is:4411 Hearst,College Station,
Texas 77845.
Article V- Organizer
The name and address of the organizer is:
Name Address
Terrence Murphy 4411 Hearst, College Station, Texas 77845
Article VI- Governing Authority
The company shall be managed by its Managers. The name and address of the person who
is to serve as a Manager until the first annual meeting of the company's Member or until successors
are elected and qualified is:
Name Address
Terrence Murphy 4411 Hearst, College Station, Texas 77845
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Article VII-Effective Date of Filing
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- This certificate of formation becomes effective when the document is filed by the secretary
of state.
Article VIII-Execution
This document is signed subject to the penalties imposed by law for the submission of a
materially false or fraudulent instrument.
Date: March io ,2008
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EIN Individual Request ,aline Application 0 Page 1 of 1
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COMPANY AGREEMENT
OF
TMFIVE Properties,LLC,
a Texas Limited Liability Company
This Company Agreement of TMFIVE Properties,LLC is executed as of March ‘O ,2008
(the"Effective Date")by the persons who sign and are identified as"Members" in this Agreement.
ARTICLE I
DEFINITIONS
1.01 Definitions. As used in this Agreement, the following terms have the following
meanings:
"Affiliate" means, with reference to any person, any other person controlling,
controlled by or under direct or indirect common control with such person.
"Agreement" means this Company Agreement, as amended from time to time.
"Assignee" means a person who receives a Transfer of all or a portion of the
Membership Interest of a Member, but who has not been admitted to the Company as a
Member.
"Bankrupt Member" means (except to the extent a Simple Majority consents
otherwise)any Member(a)that(i)makes an assignment for the benefit of creditors;(ii)files
a voluntary bankruptcy petition;(iii)becomes the subject of an order for relief or is declared
insolvent in any federal or state bankruptcy or insolvency proceedings; (iv) files a petition
or answer seeking for the Member a reorganization,arrangement,composition,readjustment,
liquidation, dissolution,termination, or similar relief under any law; (v)files an answer or
other pleading admitting or failing to contest the material allegations of a petition filed
against the Member in a Proceeding of the type described in subclauses (i) through(iv) of
this clause (a); or (vi) seeks, consents to, or acquiesces in the appointment of a trustee,
receiver, or liquidator of the Member's or of all or any substantial part of the Member's
properties; or (b) against which a Proceeding seeking reorganization, arrangement,
composition,readjustment,liquidation,dissolution,or similar relief under any law has been
commenced and one hundred twenty(120) days have expired without dismissal thereof or
with respect to which,without the Member's consent or acquiescence,a trustee,receiver,or
liquidator of the Member or of all or any substantial part of the Member's properties has been
appointed and ninety(90)days have expired without the appointment's having been vacated
or stayed, or ninety (90) days have expired after the date of expiration of a stay, if the
appointment has not previously been vacated.
"Business Day" means any day other than a Saturday, a Sunday, or a holiday on
which national banking associations in the State of Texas are closed.
"Capital Account"means a capital account maintained for a Member as provided by
Treasury Regulation 1.704-1(b)(2)(iv) of the Regulations of the Internal Revenue Service.
"Capital Contribution" means the amount of money and the Net Value of property
other than money contributed to the Company by a Member.
"Capital Commitment"of a Member represents the aggregate amount of capital that
such Member has agreed to contribute to the Company.
"Certificate of Formation" means the initial, amended, and restated certificate of
formation of the Company.
"Company" means TMFIVE Properties, LLC, a Texas limited liability company.
"Default Interest Rate"means a rate per annum equal to the lesser of(a)ten percent
(10%) >I Ius the prime rate published in The Wall Street Journal on the day the rate is
determined (or the most recent day on which The Wall Street Journal was published if the
paper is not published on the day the rate is determined),or,(b)the maximum rate permitted
by applicable law.
"Former Member"means any person who had executed this Agreement,as of the date
of this Agreement as a Member, or hereafter admitted to the Company as a Member, as
provided in the Agreement,but who is no longer a Member of the Company;however,this
term does not include a person who ceases to be a Member as a result of bankruptcy,default
or expulsion.
"Fundamental Business Transaction" has that meaning assigned to it by the
definitions in the TBOC, as may be amended from time to time,and includes(a)a merger,
(b)an interest exchange,(c)a conversion,or(d)a sale of all or substantially all of an entity's
assets (with or without good will), other than in the usual and regular course of the
Company's business.
"General Interest Rate" means a rate per annum equal to the lesser of(a)the prime
rate published in The Wall Street Journal on the day the rate is determined (or the most
recent day on which The Wall Street Journal was published if the paper is not published on
the day the rate is determined), or, (b)the maximum rate permitted by applicable law.
"Internal Revenue Code" means the Internal Revenue Code of 1986 and any
successor statute, as amended from time to time.
"Manager" means any person named in the Certificate of Formation as an initial
Manager of the Company and any person hereafter elected as a Manager of the Company as
provided in this Agreement,but does not include any person who has ceased to be a Manager
of the Company.
"Member" means any person executing this Agreement as of the date of this
Agreement as a Member or hereafter admitted to the Company as a Member as provided in
this Agreement, but does not include any person who has ceased to be a Member of the
Company.
"Membership Interest" means the interest of a Member in the Company, including,
without limitation,rights to distributions(liquidating or otherwise),allocations,information,
and to consent or approve.
"Net Value"means,in connection with a Capital Contribution of property,the value
of the asset less any indebtedness to which the asset is subject when contributed.
Percentage Interest" means the ratio in which the Members shall share profits and
losses,as provided in this Agreement. The sum of the Members'Percentage Interests shall
be one hundred percent(100%).
"Person" means any business entity, trust, estate, executor, administrator, or
individual.
"Proceeding"means any threatened,pending or completed action,suit or proceeding,
whether civil, criminal, administrative, arbitrative or investigative.
"Simple Majority"means one or more Members having among them more than fifty
percent(50%) of the Percentage Interests of all Members.
"Super Majority" means one or more Members having among them more than
sixty-six and sixty-seven hundredths percent (66.67%) of the Percentage Interests of all
Members.
"TBOC" means the Texas Business Organizations Code, including any successor
statute,as amended from time to time.
"Transfer"means any sale,transfer,encumbrance,gift,donation,assignment,pledge,
hypothecation, or other form of transfer of a Membership Interest or any portion of a
Membership Interest,whether voluntary or involuntary,whether attempted or completed,and
whether during the transferor's lifetime or upon or after the transferor's death, including by
operation of law, court order,judicial process,foreclosure, levy or attachment.
Other terms defined herein have the meaning so given them.
ARTICLE II
ORGANIZATION
2.01 Formation. The Company has been organized as a Texas limited liability company
by filing a Certificate of Formation with the Secretary of State of Texas,which may be amended or
restated from time to time.
2.02 Name. The name of the Company is "TMFIVE Properties, LLC" and all Company
business must be conducted in that name or such other names that comply with applicable law as the
Managers may select from time to time.
2.03 Registered Office and Registered Agent. The registered office of the Company
required by the TBOC to be maintained in the State of Texas shall be the office of the initial
registered agent named in the Certificate of Formation or such other office (which need not be a
place of business of the Company)as the Managers may designate from time to time in the manner
provided by law. The registered agent of the Company in the State of Texas shall be the initial
registered agent named in the Certificate of Formation or such other person or persons as the
Managers may designate from time to time in the manner provided by law.
2.04 Principal Office and Other Offices. The principal office of the Company in the
United States shall be at such place as the Managers may designate from time to time,which need
not be in the State of Texas. The Company may have such other offices as the Managers may
designate from time to time.
2.05 Purposes. The primary purposes of the Company shall be any lawful purpose which
may be undertaken by the company in accordance with the applicable provisions of the Texas
Business Organizations Code.
2.06 Powers. The Company shall have all powers necessary,suitable or convenient for the
accomplishment of the purposes of the Company, including without limitation (a) to make and
perform all contracts;(b)to borrow or lend money and secure payment thereof; (c)to engage in all
activities and transactions;and(d)to have all powers available to a limited liability company under
(i)the TBOC, (ii) any other laws in the State of Texas, and (iii)the laws of any other jurisdiction
where the Company conducts business.
2.07 Foreign Qualification. Prior to the Company's conducting business in any jurisdiction
other than Texas,the Managers shall cause the Company to comply, to the extent procedures are
available and those matters are reasonably within the control of the Managers,with all requirements
necessary to qualify the Company as a foreign limited liability company in that jurisdiction. At the
request of the Managers, each Member shall immediately execute, acknowledge, swear to, and
deliver all certificates and other instruments conforming with this Agreement that are necessary or
appropriate to qualify,continue,and terminate the Company as a foreign limited liability company
in all such jurisdictions in which the Company may conduct business.
2.08 Term. The Company will commence as provided in the Certificate of Formation for
the Company filed with the Secretary of the State of Texas, and will continue until the Company
terminates under the terms of this Agreement.
2.09 Mergers and Exchanges. The Company may be a party to a merger,an exchange,or
acquisition under the TBOC, subject to the requirements of this Agreement.
2.10 No State-Law Partnership. The Members intend that the Company not be a
partnership,a limited partnership, or a joint venture, and that no Member or Manager be a partner
or joint venturer of any other Member or Manager,for any purposes other than federal and state tax
purposes,and this Agreement may not be construed to suggest otherwise.
ARTICLE III
MEMBERSHIP
3.01 Initial Members, Capital Commitments, and Percentage Interests. The persons
listed on Exhibit A are hereby admitted to the Company as a Member,effective contemporaneously
with the Effective Date of formation of the Company. Set forth opposite the name of each Member
listed on Exhibit A is such Member's Capital Commitment and its Percentage Interest. Exhibit A
may be amended from time to time to reflect changes in or additions to the membership of the
Company. Any such amended Exhibit A shall (a)supersede all prior Exhibit A's, (b)become part
of this Agreement, and (c) be kept on file at the principal office of the Company. Each Member
represents that the Member is acquiring an interest in the Company for the account of such Member
and not with a view to distribution thereof within the meaning of the Securities Act of 1933, as
amended,or any state securities laws. The Member will not transfer such interest in contravention
of that act or any applicable state or federal securities laws.
3.02 Additional Members. Additional persons may be admitted to the Company as
Additional Members on such terms and conditions as shall be determined by a Super Majority of the
Members. The terms of admission or issuance must specify the Percentage Interests and the Capital
Commitments applicable thereto. The terms of admission or issuance may also provide for the
creation of different classes or groups of Members having different rights,powers,and duties. The
Managers shall reflect the creation of any new class or group in an amendment to this Agreement
indicating the different rights,powers, and duties, and such an amendment need be executed only
by the Managers.
3.03 Member Rights Specified in Agreement. Except as otherwise specifically provided
in this Agreement, no Member shall have the right (a) to sell, transfer or assign its interest in the
Company;(b)to require partition of the property of the Company;(c)to compel the sale of Company
assets; or(d)to cause the winding up of the Company.
3.04 No Authority. Except as otherwise specifically provided in this Agreement, no
Member(other than a Manager or an officer)has the authority or power to (a)transact business in
the name of or on behalf of the Company, (b) bind or obligate the Company, or (c) incur any
expenditures on behalf of the Company.
3.05 Liability to Third Parties. No Member or Manager shall be liable for the debts,
obligations or liabilities of the Company, including under a judgment decree or order of a court.
3.06 Withdrawal. A Member may withdraw from the Company with sixty(60)days notice
to the Managers of the Company, subject to winding up or termination as provided in Article XVI
of this Agreement.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01 Initial Contributions. Contemporaneously with the execution of this Agreement,each
Member shall make the initial Capital Contribution described for that Member in Exhibit A.
4.02 No Further Contributions. No Member shall be required to make any Capital
Contributions other than those specifically described by this Agreement,unless agreed to in writing
by the contributing Member or required by the TBOC.
4.03 Return of Contributions. No Member is entitled to the return of any part of its Capital
Contributions or to be paid interest in respect of either its Capital Account or its Capital
Contributions. An unrepaid Capital Contribution is not a liability of the Company or of any
Member.
4.04 Loans by Members. If the Company does not have sufficient cash to pay its
obligations,any Member that may agree to do so with the Managers'consent may advance all or part
of the needed funds to or on behalf of the Company. An advance described in this paragraph
constitutes a loan from the Member to the Company,bears interest at the General Interest Rate from
the date of the advance until the date of payment,and is not a Capital Contribution.
4.05 Capital Accounts. A Capital Account shall be established and maintained for each
Member. The Capital Account of each Member:
(a) shall consist of (i) the amount of money contributed by that Member to the
Company,and(ii)the fair market value of property contributed by that Member to the Company(net
of liabilities secured by the contributed property that the Company is considered to assume or take
subject to under Section 752 of the Internal Revenue Code);
(b)shall be increased by allocations to that Member of Company income and gain(or
items thereof), including income and gain exempt from tax and income and gain described in
Treasury Regulation § 1.704-1(b)(2)(iv)(g),but excluding income and gain described in Treasury
Regulation § 1.704-1(b)(4)(i); and
•
(c)shall be decreased by(i)the amount of money distributed to that Member by the
Company,(ii)the fair market value of property distributed to that Member by the Company(net of
liabilities secured by the distributed property that the Member is considered to assume or take subject
to under section 752 of the Internal Revenue Code),(iii)allocations to that Member of expenditures
of the Company described in Section 705(a)(2)(B)of the Internal Revenue Code,and(iv)allocations
of Company loss and deduction (or items thereof), including loss and deduction described in
Treasury Regulation § 1.704-1(b)(2)(iv)(g),but excluding items described in clause (c)(iii) above
and loss or deduction described in Treasury Regulation § 1.704-1(b)(4)(i) or § 1.704-1(b)(4)(iii).
The Capital Account of each Member also shall be maintained and adjusted as permitted by the
provisions of Treasury Regulation§ 1.704-1(b)(2)(iv)(f)and as required by the other provisions of
Treasury Regulation § 1.704-1(b)(2)(iv) and 1.704-1(b)(4), including adjustments to reflect the
allocations to the Members of depreciation, depletion, amortization, and gain or loss as computed
for tax purposes,as required by Treasury Regulation§1.704-1(b)(2)(iv)(g). A Member that has more
than one Membership Interest shall have a single Capital Account that reflects all its Membership
Interests,regardless of the class of Membership Interests owned by that Member and regardless of
the time or manner in which those Membership Interests were acquired. On the transfer of all or part
of a Membership Interest,the Capital Account of the transferor that is attributable to the transferred
Membership Interest or part thereof shall carry over to the transferee Member in accordance with the
provisions of Treasury Regulation§ 1.704-1(b)(2)(iv)(1).
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.01 Allocations.
(a)Except as may be required by Section 704(c)of the Internal Revenue Code and
Treasury Regulation§ 1.704-1(b)(2)(iv)(f)(4),all items of income,gain,loss, deduction and credit
of the Company shall be allocated among the Members in accordance with their Percentage Interests.
(b)All items of income,gain,loss,deduction,and credit allocable to any Membership
Interest that may have been transferred shall be allocated between the transferor and the transferee
based on the portion of the calendar year during which each was recognized as owning that
Membership Interest, without regard to the results of Company operations during any particular
portion of that calendar year and without regard to whether cash distributions were made to the
transferor or the transferee during that calendar year;provided, however, that this allocation must
be made in accordance with a method permissible under Section 706 of the Internal Revenue Code
and the regulations thereunder.
(c)In the event any Member unexpectedly receives any adjustments, allocations or
distributions described in§ 1.704-1(b)(2)(ii)(d)(4),(5)or(6)of the Treasury Regulations,items of
the Company's income and gain shall be specially allocated as a qualified income offset to each such
Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury
Regulations,the Adjusted Capital Account Deficit of such Member as quickly as possible,provided
that an allocation pursuant to this paragraph 5.01(c)shall be made only if and to the extent that such
Member has an Adjusted Capital Account Deficit after all other allocations provided for in this
Article have been tentatively made as if this paragraph 5.01(c)were not in this Agreement.
5.02 Distributions.
(a) From time to time (but at least once each calendar quarter)the Managers shall
determine in their reasonable judgment to what extent(if any)the Company's cash on hand exceeds
its current and anticipated needs,including,without limitation,for operating expenses,debt service,
acquisitions, and a reasonable contingency reserve. If such an excess exists, the Managers shall
cause the Company to distribute to the Members,in accordance with their Percentage Interests, an
amount in cash equal to that excess.
(b)From time to time the Managers also may cause property of the Company other
than cash to be distributed to the Members,which distribution must be made in accordance with their
Percentage Interests and may be made subject to existing liabilities and obligations. Immediately
prior to such a distribution,the Capital Accounts of the Members shall be adjusted as provided in
Treasury Regulation § 1.704-1(b)(2)(iv)(f).
ARTICLE VI
MANAGEMENT
6.01 Management by Managers. Except for situations in which the approval of the
Members is required by this Agreement or by nonwaivable provisions of applicable law,and subject
to the provisions of paragraph 6.02 of this Agreement, the Managers shall have the sole and
exclusive control of the management,business and affairs of the Company,and the Managers shall
make all decisions and take all actions for the Company not otherwise provided for in this
Agreement, including, without limitation,the following:
(a) entering into, making, and performing contracts, agreements, and other
undertakings binding the Company that may be necessary, appropriate, or advisable in
furtherance of the purposes of the Company and making all decisions and waivers
thereunder;
(b) opening and maintaining bank and investment accounts and arrangements,
drawing checks and other orders for the payment of money,and designating individuals with
authority to sign or give instructions with respect to those accounts and arrangements;
(c)maintaining the assets of the Company in good order;
(d) collecting sums due the Company;
(e)to the extent that funds of the Company are available therefor,paying debts and
obligations of the Company;
(f) acquiring, utilizing for Company purposes, and disposing of any asset of the
Company;
(g) borrowing money or otherwise committing the credit of the Company for
Company activities and voluntary prepayments or extensions of debt;
(h) selecting, removing, and changing the authority and responsibility of lawyers,
accountants, and other advisers and consultants;
(i) obtaining insurance for the Company;
(j) determining distributions of Company cash and other property as provided in
paragraph 5.02 of this Agreement;
(k)establishing a seal for the Company; and
(1)designating one or more committees,each of which shall be comprised of one or
more Managers,to exercise any authority of the Managers in the management,business and
affairs of the Company.
6.02 Restrictions. Notwithstanding the provisions of paragraph 6.01 of this Agreement,the
Managers may not cause the Company to do any of the following without complying with the
applicable requirements set forth below:
(a) enter into a Fundamental Business Transaction, without complying with the
applicable procedures set forth in the TB OC regarding approval by the Members(unless such
provision is rendered inapplicable by another provision of applicable law);
(b) do any act in violation of this Agreement;
(c)admit a Member, except as expressly permitted by this Agreement;
(d) do any act which requires the prior approval of the Members;
(e)possess Company property or assign rights in Company property, other than for
a Company purpose; or
(f) amend this Agreement, except as expressly permitted by this Agreement.
6.03 Conflicts of Interest. Subject to the other express provisions of this Agreement,each
Manager,Member and officer of the Company at any time and from time to time may engage in and
possess interests in other business ventures of any and every type and description,independently or
with others, including ones in competition with the Company, with no obligation to offer to the
Company or any other Member,Manager or officer the right to participate therein. The Company
may transact business with any Manager,Member,officer or Affiliate thereof,provided the contract
or transaction is fair to the Company as of the time it is authorized or ratified by Managers or
Members, as the case may be.
6.04 Number and Term of Office. The number of Managers of the Company shall be
determined from time to time by resolution of the Managers, and shall consist of at least one (1);
provided, however, that no decrease in the number of Managers that would have the effect of
shortening the term of an incumbent Manager may be made by the Managers. If the Managers make
no such determination,the number of Managers shall be the number set forth in the Certificate of
Formation as the number of Managers constituting the initial Managers. Each Manager shall hold
office for the term for which he is elected and thereafter until his successor shall have been elected
and qualified, or until his earlier death,resignation or removal. Unless otherwise provided in the
Certificate of Formation,Managers need not be Members or residents of the State of Texas.
6.05 Vacancies; Removal; Resignation. Any Manager position to be filled by reason of
an increase in the number of Managers or other reason may be filled by election at an annual or
special meeting of Members called for that purpose. A Manager elected to fill a vacancy occurring
other than by reason of an increase in the number of Managers shall be elected for the unexpired
term of his predecessor in office. At any meeting of Members at which a quorum of Members is
present called expressly for that purpose, or pursuant to a written consent adopted pursuant to this
Agreement, any Manager may be removed, with or without cause, by a Super Majority. Any
Manager may resign at any time. Such resignation shall be made in writing and shall take effect at
the time specified therein, or if no time be specified, at the time of its receipt by the remaining
Managers. The acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
6.06 Compensation. For their services in the management of the Company and its
operations,the Managers may receive such compensation,if any, as may be designated from time
to time by a Simple Majority of the Members.
6.07 Reimbursement. The Managers are not required to advance any funds to pay costs and
expenses of the Company. However,in the event the Managers advance such funds,the Managers
shall be entitled to be reimbursed for out-of-pocket costs and expenses incurred in the course of their
service hereunder, including the portion of their overhead reasonably allocable to Company
activities.
6.08 Meetings.
(a)Unless otherwise required by law or provided in the Certificate of Formation or
this Agreement,a majority of the total number of Managers fixed by,or in the manner provided in,
the Certificate of Formation or this Agreement shall constitute a quorum for the transaction of
business of the Managers, and the act of a majority of the Managers present at a meeting at which
a quorum is present shall be the act of the Managers. A Manager who is present at a meeting of the
Managers at which action on any Company matter is taken shall be presumed to have assented to the
action unless his dissent shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as secretary of the meeting before the
adjournment thereof or shall deliver such dissent to the Company immediately after the adjournment
of the meeting. Such right to dissent shall not apply to a Manager who voted in favor of such action.
(b) Meetings of the Managers may be held at such place or places as shall be
determined from time to time by resolution of the Managers. At all meetings of the Managers,
business shall be transacted in such order as shall from time to time be determined by resolution of
the Managers. Attendance of a Manager at a meeting shall constitute a waiver of notice of such
meeting, except where a Manager attends a meeting for the purpose of objecting to the transaction
of any business on the ground that the meeting is not lawfully called or convened.
(c) In connection with any annual meeting of Members at which Managers were
elected, the Managers may, if a quorum is present, hold their first meeting for the transaction of
business immediately after and at the same place as such annual meeting of the Members. Notice
of such meeting at such time and place shall not be required.
(d)Regular meetings of the Managers shall be held at such times and places as shall
be designated from time to time by resolution of the Managers.Notice of such regular meetings shall
not be required.
(e) Special meetings of the Managers may be called by any Manager on at least 24
hours notice to each other Manager. Such notice need not state the purpose or purposes of,nor the
business to be transacted at,such meeting,except as may otherwise be required by law or provided
for by the Certificate of Formation or this Agreement. Notice of special meetings may be given by
facsimile or electronic message(e-mail).
6.09 Approval or Ratification of Acts or Contracts by Members. The Managers in their
discretion may submit any act or contract for approval or ratification at any annual meeting of the
Members,or at any special meeting of the Members called for the purpose of considering any such
act or contract. Any act or contract that shall be approved or be ratified by a majority of the
Managers shall be as valid and as binding upon the Company and upon all the Members as if it shall
have been approved or ratified by every Member of the Company.
6.10 Action Without Meeting. Any action permitted or required by the TBOC, the
Certificate of Formation or this Agreement to be taken at a meeting of the Managers or any
committee designated by the Managers may be taken without a meeting if a consent in writing,
setting forth the action to be taken,is signed by all the Managers or members of such committee,as
the case may be. Every written consent shall bear the date of signature of each Manager who signs
the consent, and the consent may be in one or more counterparts. A telegram,telex, cablegram or
similar transmission by a Manager,or a photographic,photostatic,facsimile or similar reproduction
of a writing signed by a Manager, shall be regarded as signed by the Manager for purposes of this
paragraph. Such consent shall have the same force and effect as a unanimous vote at a meeting and
may be stated as such in any document or instrument filed with the Secretary of State of Texas,and
the execution of such consent shall constitute attendance or presence in person at a meeting of the
Managers or any such committee, as the case may be. The signed consent or a signed copy of the
consent shall be kept on file at the principal office of the Company.
6.11 Action by Telephone Conference or Other Remote Communications Technology.
Subject to the requirements of the TBOC,the Certificate of Formation or this Agreement for notice
of meetings,unless otherwise restricted by the Certificate of Formation, Managers, or members of
any committee designated by the Managers,may participate in and hold a meeting of the Managers
or any committee of Managers, as the case may be, by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can hear each other.
Or, another suitable electronic communications system may be used including video-conferencing
technology or the Internet,but only if each Manager entitled to participate in the meeting consents
to the meeting being held by means of that system and the system provides access to the meeting in
a manner or using a method by which each Manager participating in the meeting can communicate
concurrently with each other participant. Participation in such meeting shall constitute attendance
and presence in person at such meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
6.12 Broad Discretion and Authority of Managers. Each Member acknowledges and
understands that the Managers are granted broad discretion and authority under this Agreement and
that the Managers' exercise of such broad discretion and authority may impair the value of the
Membership Interest of the Member. Such Member further acknowledges and understands that the
Managers would not cause the Company to issue a Membership Interest to the Member if the
Managers did not have such broad discretion and authority,and such Member agrees not to challenge
the Manager's exercise of such discretion and authority.
ARTICLE VII
CONFIDENTIAL INFORMATION
7.01 Confidential Information. The Members agree that the Managers from time to time
may determine, due to contractual obligations, business concerns, or other considerations, that
certain information regarding the business, affairs, properties, and financial condition of the
Company should be kept confidential and not provided to some or all other Members,and that it is
not just or reasonable for those Members or assignees or representatives thereof to examine or copy
that information. The Members acknowledge that,from time to time,they may receive information
from or regarding the Company in the nature of trade secrets or that otherwise is confidential,the
release of which may be damaging to the Company or persons with which it does business. Each
Member shall hold in strict confidence any information it receives regarding the Company that is
identified as being confidential(and if that information is provided in writing,that is so marked)and
may not disclose it to any person other than another Member or a Manager, except for disclosures
(i) compelled by law (but the Member must notify the Managers promptly of any request for that
information,before disclosing it,if practicable),(ii)to advisers or representatives of the Member or
persons to which that Member's Membership Interest may be transferred as permitted by this
Agreement,but only if the recipients have agreed to be bound by the provisions of this paragraph,
or(iii)of information that Member also has received from a source independent of the Company that
the Member reasonably believes obtained that information without breach of any obligation of
confidentiality.
7.02. Specific Performance. The Members acknowledge that breach of the provisions of
paragraph 7.01 of this Agreement may cause irreparable injury to the Company for which monetary
damages are inadequate, difficult to compute, or both. Accordingly, the Members agree that the
provisions of paragraph 7.01 of this Agreement may be enforced by specific performance.
ARTICLE VIII
MEETING OF MEMBERS
8.01 Meetings.
(a) A quorum shall be present at a meeting of Members if the holders of a Simple
Majority are represented at the meeting in person or by proxy. With respect to any matter,other than
a matter for which the affirmative vote of the holders of a specified portion of the Percentage
Interests of all Members entitled to vote is required by the TBOC or this Agreement,the affirmative
vote of a Simple Majority at a meeting of Members at which a quorum is present shall be the act of
the Members, except as provided by paragraph 8.01(b) or by another specific provision in this
Agreement.
(b)The vote of a Super Majority of the Members shall be required for the Company
to enter into a Fundamental Business Transaction.
(c)All meetings of the Members shall be held at the principal place of business of the
Company or at such other place within or outside the State of Texas as shall be specified or fixed
in the notices or waivers of notice thereof;provided that any or all Members may participate in any
such meetings by means of conference telephone or similar communications equipment pursuant to
paragraph 8.06 of this Agreement.
(d) Notwithstanding the other provisions of the Certificate of Formation or this
Agreement,the chairman of the meeting or the holders of a Super Majority shall have the power to
adjourn such meeting from time to time,without any notice other than announcement at the meeting
of the time and place of the holding of the adjourned meeting. If such meeting is adjourned by the
Members, such time and place shall be determined by a vote of the holders of a Super Majority.
Upon the resumption of such adjourned meeting, any business may be transacted that might have
been transacted at the meeting as originally called.
(e)An annual meeting of the Members,for the election of the Managers and for the
transaction of such other business as may properly come before the meeting, shall be held at such
place,within or outside the State of Texas,on such date and at such time as the Managers shall fix
and set forth in the notice of the meeting,which date shall be within thirteen(13)months subsequent
to the date of organization of the Company or the last annual meeting of Members,whichever most
recently occurred.
(f) Special meetings of the Members for any proper purpose or purposes may be
called at any time by the Managers or the holders of at least ten percent of the Percentage Interests
of all Members. If not otherwise stated in or fixed in accordance with the remaining provisions
hereof, the record date for determining Members entitled to call a special meeting is the date any
Member first signs the notice of that meeting. Only business within the purpose or purposes
described in the notice(or waiver thereof)required by this Agreement may be conducted at a special
meeting of the Members.
(g)Written or printed notice stating the place,day and hour of the meeting and,in the
case of a special meeting,the purpose or purposes for which the meeting is called,shall be given not
less than ten(10)nor more than sixty(60)days before the date of the meeting, either personally or
by mail, by or at the direction of the Managers or person calling the meeting, to each Member
entitled to vote at such meeting. If mailed, any such notice shall be deemed to be given when
deposited in the United States mail, addressed to the Member at his address on the voting list
provided for in paragraph 8.02 of this Agreement,with postage thereon prepaid.
(h)The date on which notice of a meeting of Members is mailed or the date on which
the resolution of the Managers declaring a distribution is adopted, as the case may be, shall be the
record date for the determination of the Members entitled to notice of or to vote at such meeting,
including any adjournment thereof, or the Members entitled to receive such distribution.
(i)Notice of meetings may be given to Members by facsimile or electronic message
(e-mail).
8.02 Voting List. The Managers shall make,at least ten(10)days before each meeting of
Members, a complete list of the Members entitled to vote at such meeting or any adjournment
thereof,arranged in alphabetical order,with the address of and the Percentage Interests held by each.
For a period of ten(10) days prior to such meeting, such list shall be kept on file at the registered
office or principal place of business of the Company and shall be subject to inspection by any
Member at any time during usual business hours. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of any Member during the
whole time of the meeting. The original membership records shall be prima-facie evidence as to
who are the Members entitled to examine such list or transfer records or to vote at any meeting of
Members. Failure to comply with the requirements of this paragraph shall not affect the validity of
any action taken at the meeting.
8.03 Proxies. A Member may vote either in person or by proxy executed in writing by the
Member. A telegram,telex,cablegram or similar transmission by the Member,or a photographic,
photostatic,facsimile or similar reproduction of a writing executed by the Member shall be treated
as an execution in writing for purposes of this paragraph. Proxies for use at any meeting of Members
or in connection with the taking of any action by written consent shall be filed with the Managers,
before or at the time of the meeting or execution of the written consent, as the case may be. All
proxies shall be received and taken charge of and all ballots shall be received and canvassed by the
Managers,who shall decide all questions touching upon the qualification of voters,the validity of
the proxies, and the acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or inspectors shall
decide all such questions. No proxy shall be valid after eleven (11) months from the date of its
execution unless otherwise provided in the proxy. A proxy shall be revocable unless the proxy form
conspicuously states that the proxy is irrevocable and the proxy is coupled with an interest. Should
a proxy designate two or more persons to act as proxies,unless that instrument shall provide to the
contrary,a majority of such persons present at any meeting at which their powers thereunder are to
be exercised shall have and may exercise all the powers of voting or giving consents thereby
conferred,or if only one be present,then such powers may be exercised by that one; or, if an even
number attend and a majority do not agree on any particular issue,the Company shall not be required
to recognize such proxy with respect to such issue if such proxy does not specify how the Percentage
Interests that are the subject of such proxy are to be voted with respect to such issue.
8.04 Conduct of Meetings. All meetings of the Members shall be presided over by the
chairman of the meeting,who shall be a Manager(or representative thereof)designated by a majority
of the Managers. The chairman of any meeting of Members shall determine the order of business
and the procedure at the meeting, including the regulation of the manner of voting and the conduct
of discussion.
8.05 Action by Unanimous Written Consent Without Meeting.
(a)Any action required or permitted to be taken at any annual or special meeting of
Members may be taken without a meeting,without prior notice, and without a vote,by unanimous
written consent of the Members or committee members,as the case may be,setting forth the action
so taken. No written consent shall be effective to take the action that is the subject to the consent
unless,within sixty(60)days after the date of the earliest dated consent delivered to the Company
in the manner required by this paragraph, the signed consent or consents are delivered to the
Company by delivery to its registered office, its principal place of business, or the Managers.
Delivery shall be by hand or certified or registered mail, return receipt requested. Delivery to the
Company's principal place of business shall be addressed to the Managers. Every written consent
shall bear the date of signature of each Member who signs the consent, and the consent may be in
one or more counterparts. A telegram,telex, cablegram or similar transmission by a Member,or a
photographic,photostatic,facsimile or similar reproduction of a writing signed by a Member,shall
be regarded as signed by the Member for purposes of this paragraph. The signed consent or a signed
copy of the consent shall be kept on file at the principal office of the Company.
(b)The record date for determining Members entitled to consent to action in writing
without a meeting shall be the first date on which a signed written consent setting forth the action
taken or proposed to be taken is delivered to the Company by delivery to its registered office, its
principal place of business,or the Managers. Delivery shall be by hand or by certified or registered
mail, return receipt requested. Delivery to the Company's principal place of business shall be
addressed to the Managers.
(c) If any action by Members is taken by written consent, any articles or documents
filed with the Secretary of State of Texas as a result of the taking of the action shall state,in lieu of
any statement required by the TBOC concerning any vote of Members,that written consent has been
given in accordance with the provisions of the TBOC and that any written notice required by the
TBOC has been given.
8.06 Action by Telephone Conference or Other Remote Communications Technology.
Members may participate in and hold a meeting by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can hear each other.
Or,another suitable electronic communications system may be used including video-conferencing
technology or the Internet,but only if each member entitled to participate in the meeting consents
to the meeting being held by means of that system and the system provides access to the meeting in
a manner or using a method by which each member participating in the meeting can communicate
concurrently with each other participant. Participation in such meeting shall constitute attendance
and presence in person at such meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
8.07 Classes of Members;Voting. At an annual or special meeting called for that purpose,
the Members may from time to time establish classes or groups of Members. One or more of the
Members'groups or classes may have certain expressed relative rights,powers,and duties,including
voting rights, to be established at the time when the classes or groups are created, with seniority
granted to one or more class or group as designated by the Members.
ARTICLE IX
OFFICERS
9.01 Qualification. The Managers may,from time to time,designate one or more persons
to be officers of the Company. No officer need be a resident of the State of Texas, a Member or a
Manager. Any officers so designated shall have such authority and perform such duties as the
Managers may, from time to time, delegate to them. The Managers may assign titles to particular
officers. Unless the Managers decide otherwise,if the title is one commonly used for officers of a
business corporation,the assignment of such title shall constitute the delegation to such officer of
the authority and duties that are normally associated with that office, subject to any specific
delegation of authority and duties made to such officer by the Managers pursuant to this paragraph.
Each officer shall hold office until his successor shall be duly designated and qualify for such office,
until his death, or until he shall resign or shall have been removed in the manner hereinafter
provided. Any vacancy occurring in any office of the Company(other than Manager)may be filled
by the Managers. Any number of offices may be held by the one person.
9.02. Compensation. The salaries or other compensation,if any,of the officers and agents
of the Company shall be fixed from time to time by the Managers. However, election or
appointment of an officer or agent shall not of itself, nor shall anything in this Agreement, create
contract rights.
9.03. Resignation. Any officer may resign as such at any time. Such resignation shall be
made in writing and shall take effect at the time specified therein, or if no time be specified,at the
time of its receipt by the Managers. The acceptance of a resignation shall not be necessary to make
it effective,unless expressly so provided in the resignation.
9.04. Removal. Any officer may be removed as such, either with or without cause,by the
Managers whenever in their judgment the best interests of the Company will be served thereby;
provided,however,that such removal shall be without prejudice to the contract rights,if any,of the
person so removed.
ARTICLE X
INDEMNIFICATION
10.01 Right to Indemnification. Subject to the limitations and conditions as provided in
this Article, each person who was or is made a party or is threatened to be made a party to or is
involved in any Proceeding,or any appeal in such a Proceeding,or any inquiry or investigation that
could lead to such a Proceeding,by reason of the fact that he or she,or a person of whom he or she
is the legal representative, is or was a Member or Manager of the Company or while a Member or
Manager of the Company is or was serving at the request of the Company as a Manager, director,
officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another
foreign or domestic limited liability company, corporation, partnership, joint venture, sole
proprietorship,trust,employee benefit plan or other enterprise shall be indemnified by the Company
to the fullest extent permitted by the TBOC,as the same exist or may hereafter be amended(but,in
the case of any such amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than said law permitted the Company to provide prior to such
amendment)against judgments,penalties(including excise and similar taxes and punitive damages),
fines, settlements and reasonable expenses(including,without limitation, attorney's fees) actually
incurred by such person in connection with such Proceeding,and indemnification under this Article
shall continue as to a person who has ceased to serve in the capacity which initially entitled such
person to indemnity hereunder. The rights granted pursuant to this Article shall be deemed contract
rights,and no amendments,modification or repeal of this Article shall have the effect of limiting or
denying any such rights with respect to actions taken or Proceeding arising prior to any such
amendment,modification or repeal. It is expressly acknowledged that the indemnification provided
in this Article could involve indemnification for negligence or under theories of strict liability.
10.02 Advance Payment. The right to indemnification conferred in this Article shall
include the right to be paid or reimbursed by the Company the reasonable expenses incurred by a
person of the type entitled to be indemnified under paragraph 10.01 of this Agreement who was, is
or is threatened to be made a named defendant or respondent in a Proceeding in advance of the final
disposition of the Proceeding and without any determination as to the person's ultimate entitlement
to indemnification; provided, however, that the payment of such expenses incurred by any such
person in advance of the final disposition of a Proceeding, shall be made only upon delivery to the
Company of a written affirmation by such person of his or her good faith belief that he has met the
standard of conduct necessary for indemnification under this Article and a written undertaking, by
or on behalf of such person,to repay all amounts so advanced if it shall ultimately be determined that
such indemnified person is not entitled to be indemnified under this Article or otherwise.
10.03 Indemnification of Officers,Employees and Agents. The Company, by adoption
of a resolution of the Managers, may indemnify and advance or reimburse expenses to an officer,
employee or agent of the Company to the same extent and subject to the same conditions under
which it may indemnify and advance expenses to Managers under this Article; and, the Company
may indemnify and advance or reimburse expenses to persons who are not or were not Managers,
officers, employees, or agents of the Company but who are or were serving at the request of the
Company as a Manager, director,officer,partner,venturer,proprietor, trustee. employee, agent or
similar functionary of another foreign or domestic limited liability company, corporation,
partnership,joint venture,sole proprietorship,trust,employee benefit plan or other enterprise against
any liability asserted against him and incurred by him in such a capacity or arising out of his status
as such a person to the same extent that it may indemnify and advance expenses to Managers under
this Article.
10.04 Appearance as a Witness. Notwithstanding any other provision of this Article,the
Company may pay or reimburse expenses incurred by a Member or Manager in connection with his
appearance as a witness or other participation in a Proceeding at a time when he is not a named
defendant or respondent in the Proceeding.
10.05 Nonexclusivity of Rights. The right to indemnification and the advancement and
payment of expenses conferred in this Article shall not be exclusive of any other right which a
Member or Manager or other person indemnified pursuant to paragraph 10.03 of this Agreement may
have or hereafter acquire under any law (common or statutory), provision of the Certificate of
Formation or this Agreement, agreement,vote of disinterested Managers or otherwise.
10.06 Insurance. The Company may purchase and maintain insurance, at its expense, to
protect itself and any person who is a Member or was serving as a Manager, officer, employee or
agent of the Company or is or was serving at the request of the Company as a Manager, director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another
foreign or domestic limited liability company, corporation, partnership, joint venture, sole
proprietorship,trust,employee benefit plan or other enterprise against any expense,liability or loss,
whether or not the Company would have the power to indemnify such person against such expense,
liability or loss under this Article.
10.07 Member Notification. To the extent required by law, any indemnification of or
advance of expenses to a Member or Manager in accordance with this Article shall be reported in
writing to the Members with or before the notice or waiver of notice of the next Members'meeting
or with or before the next submission to Members of a consent to action without a meeting and, in
any case,within the twelve month period immediately following the date of the indemnification or
advance.
10.08 Savings Clause. If this Article or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction,then the Company shall nevertheless indemnify and
hold harmless each Member or Manager or any other person indemnified pursuant to this Article as
to costs, charges, and expenses (including attorney's fees),judgments, fines and amounts paid in
settlement with respect to any action,suit or Proceeding,whether civil,criminal,administrative or
investigative to the full extent permitted by any applicable portion of this Article that shall not have
been invalidated and to the fullest extent permitted by applicable law.
ARTICLE XI
TAXES
11.01 Tax Returns. The Managers shall cause to be prepared and filed all necessary federal
and state income tax returns for the Company,including making the elections described in paragraph
11.02 of this Agreement. Each Member shall furnish to the Managers all pertinent information in
its possession relating to Company operations that is necessary to enable the Company's income tax
returns to be prepared and filed.
11.02 Tax Elections. The Company shall make the following elections on the appropriate
tax returns:
(a)to adopt the calendar year as the Company's fiscal year;
(b)to adopt the cash method of accounting for keeping the Company's books and
records;
(c)if a distribution of Company property as described in Section 734 of the Internal
Revenue Code occurs or if a transfer of a Membership Interest as described in Section 743
of the Internal Revenue Code occurs,on written request of any Member,to elect,pursuant
to Section 754 of the Internal Revenue Code,to adjust the basis of Company properties;
(d)to elect to amortize the organizational expenses of the Company and the startup
expenditures of the Company under Section 195 of the Internal Revenue Code ratably over
a period of sixty(60)months as permitted by Section 709(b)of the Internal Revenue Code;
and
(e)any other election the Managers may deem appropriate and in the best interest of
the Members.
Neither the Company nor any Manager or Member may make an election for the Company to be
excluded from the application of the provisions of subchapter K of chapter 1 subtitle A of the
Internal Revenue Code or any similar provisions of applicable state law, and no provision of this
Agreement shall be construed to sanction or approve such an election.
11.03 "Tax Matters Partner." A majority of the Managers shall designate one Manager
that is a Member to be the "tax matters partner"of the Company pursuant to Section 6231(a)(7)of
the Internal Revenue Code; or, if there is no Manager that is a Member, the "tax matters partner"
shall be a Member that is designated as such by a Simple Majority. Any Member who is designated
"tax matters partner" shall take such action as may be necessary to cause each other Member to
become a"notice partner"within the meaning of Section 6223 of the Internal Revenue Code. Any
Member who is designated "tax matters partner" shall inform each other Member of all significant
matters that may come to its attention in its capacity as"tax matters partner"by giving notice thereof
on or before the fifth Business Day after becoming aware thereof and,within that time,shall forward
to each other Member copies of all significant written communications it may receive in that
capacity. Any Member who is designated "tax matters partner" may not take action contemplated
by Section 6222 through 6232 of the Internal Revenue Code without the consent of a Simple
Majority, but this sentence does not authorize such Manager (or any other Manager) to take any
action left to the determination of an individual Member under Sections 6222 through 6232 of the
Internal Revenue Code.
ARTICLE XII
BOOKS,RECORDS,REPORTS,AND BANK ACCOUNTS
12.01 Maintenance of Books. The Company shall keep books and records of accounts and
shall keep minutes of the proceedings of its Members, its Managers and each committee of the
Managers. The books of account for the Company shall be maintained on a cash basis in accordance
with the terms of this Agreement, except that the Capital Accounts of the Members shall be
maintained in accordance with Article IV of this Agreement. The calendar year shall be the
accounting year of the Company.
12.02 Accounts. The Managers shall establish and maintain one or more separate bank and
investment accounts and arrangements for Company funds in the Company name with financial
institutions and firms that the Managers determine. The Managers may not commingle the
Company's funds with the funds of any Member; however, Company funds may be invested in a
manner the same as or similar to the Managers'investment of their own funds or investments by their
Affiliates.
ARTICLE XIII
TRANSFERS
13.01 Limited Right to Transfer. No Member or Assignee shall make any Transfer of all
or any part of its Membership Interest,whether now owned or hereafter acquired,except(a)with the
consent of a Super Majority of the Members; (b)as provided by Article XIV of this Agreement;(c)
as a Defaulting Member as provided by paragraph 15.01(f)of this Agreement;or(d)upon winding
up or termination, as provided by paragraph 16.03 of this Agreement. Any attempted Transfer by
a person of an interest or right, or any part thereof, in or in respect of the Company other than as
specifically provided by this Agreement shall be, and is hereby declared,null and void ab initio.
13.02 Rights of an Assignee.
(a)Unless and until an Assignee becomes a Substituted Member of the Company as
provided in this Agreement,the Assignee shall be entitled only to(i)allocation of income,gain,loss,
deduction, credit, or similar items, and to receive distributions to which the assignor is entitled to
the extent these items were assigned, and(ii)reasonable information or account of transactions of
the Company and to make reasonable inspection of the books and records of the Company. The
Membership Interest of the Assignee shall not be considered in the voting requirements of the
Company,and the Assignee shall have no right to participate in the operations or management of the
Company.
(b) In the event that the Members make additional contributions to the Company
which the Membership Interest is held by an Assignee,the Assignor Member and its Assignee shall
be jointly and severally liable for the corresponding contribution in connection with the Membership
Interest held by Assignee. If the Assignor Member or Assignee does not make such contribution in
accordance with the provisions of this Agreement,then the Assignor Member and Assignee shall be
treated as being in Default. In the event that one or more new Members are admitted into the
Company, or one or more existing Members increase their Membership Interest, the Membership
Interest of the Assignee may be correspondingly reduced and no consent or other action on the part
of such Assignee shall be required.
13.03 Legal Opinion. For the right of a Member to transfer a Membership Interest or any
part thereof or of any Person to be admitted to the Company in connection therewith to exist or be
exercised,the Company must receive an opinion from legal counsel acceptable to the Managers that
states (a)the Transfer is exempt from registration under federal and state securities laws, (b) the
Transfer will not cause the Company to be in violation of federal and state securities laws, (c)the
Transfer will not adversely affect the status of the Company as a partnership under the Internal
Revenue Code or Treasury Regulations,and(d)the Transfer will not result in the Company's being
considered to have terminated within the meaning of the Internal Revenue Code or Treasury
Regulations. The Managers,however,may waive the requirements of this paragraph.
13.04 Admission as Substituted Member. An Assignee has the right to be admitted to the
Company as a Substituted Member with the Percentage Interest and the Capital Commitment so
transferred to such person, in the event that:
(a)the Member making such Transfer grants the Assignee the right to be so admitted;
(b) such Transfer is consented to in accordance with paragraph 13.01 of this
Agreement; and
(c)a written,signed and dated instrument evidencing the Transfer has been filed with
the Company in form and substance reasonably satisfactory to the Managers, and said
instrument contains (i)the agreement by the Assignee to be bound by all of the terms and
provisions of this Agreement,(ii)any necessary or advisable representations and warranties,
including that the Transfer was made in accordance with all applicable laws,regulations,and
securities laws,(iii)the Percentage Interests and the Capital Commitments after the Transfer
of the Member effecting the Transfer and the person to which the Membership Interest of
part thereof is transferred(which together must total the Percentage Interest and the Capital
Commitment of the Member effecting the Transfer before the Transfer) and(iv)the name,
address and any other pertinent information necessary for amended Exhibit A and to make
distributions.
13.05 Transfer to Existing Member. In the event of a Transfer to an existing Member,the
existing Member shall be automatically deemed to be a Substituted Member.
13.06 Third Party Offer. In the event a Member desires to sell all or any portion of its
Membership Interest to another person(other than an existing Member),the selling Member shall
first offer to sell the Membership Interest to the other existing Members. Upon the receipt of an
offer from a Third Party to purchase such Membership Interest,the selling Member shall promptly
deliver a copy of the Third Party offer to all other Members. Each Member will have fifteen(15)
days from the date of receipt of the Third Party offer to notify the selling Member in writing that the
other Member intends to purchase the Membership Interest upon the terms and conditions of the
Third Party offer. If more than one other Member desires to purchase the Membership Interest,each
of the purchasing Members shall purchase a portion of the Membership Interest that is proportional
to that Member's Percentage Interest. If none of the other Members give notification within fifteen
(15) days of an intention to purchase the Membership Interest, then the selling Member shall be
permitted to sell the Membership Interest to the Third Party upon the terms and conditions of the
Third Party offer.
13.07 Reasonable Expenses. The Member effecting a Transfer and the Substituted Member
shall pay,or reimburse the Company for,all costs incurred by the Company in connection with the
admission of the Substituted Member (including, without limitation, the legal fees incurred in
connection with the legal opinions referred to in paragraph 13.03 of this Agreement) on or before
the tenth (10th) day after the receipt by that person of the Company's invoice for the amount due.
If payment is not made by the date due,the person owing the amount shall pay interest on the unpaid
amount from the date due until paid at a rate per annum equal to the Default Interest Rate.
ARTICLE XIV
BUYOUT OF MEMBERSHIP INTEREST
14.01 Termination of Marital Relationship.
(a)If the marital relationship of a Member is teiluinated by death or divorce and such
Member does not succeed to all of such Member's spouse's community or separate interest, if any,
in the Membership Interest (such spouse is referred to hereafter in this Article as the "Assignee
Spouse"),either as outright owner of such Membership Interest or as a trustee of a trust holding such
Membership Interest,whether or not such Member is a beneficiary of such trust,then such Member
shall have the option to purchase at Fair Value(determined as of the date of the death or divorce of
the Member)the Assignee Spouse's interest in the Membership Interest to which such Member does
not succeed. Such option must be exercised within ninety (90) days after the death of or the
Member's divorce from the Assignee Spouse. Should the Member fail to exercise such option within
such 90-day period,then the Company shall have the option to purchase such Membership Interest
at Fair Value for a period of ninety(90)days after the lapse of the initial 90-day period.
(b)Any Membership Interest of the Company held by a Member as a trustee of a trust
as a result of the death of or the Member's divorce from the Assignee Spouse shall be treated as
owned by such Member for purposes of this agreement. If such Member ceases to act as trustee of
such trust for any reason,then such Member shall have the option to purchase all of the Membership
Interest at Fair Value held in such trust. Such option must be exercised within ninety(90)days after
such Member ceases to act as trustee of such trust. Should such Member fail to exercise such option
within such 90-day period,then the Company shall have the option to purchase such Membership
Interest for a period of ninety(90)days after the lapse of the initial 90-day period.
14.02 Death of Member. Commencing upon the death of a Member, the surviving
Members shall for a period of ninety(90)days have the option to purchase all or any portion of the
deceased Member's Membership Interest at Fair Value(determined as of the date of the death of the
Member); provided, however, the exercise of said option shall require the approval of a Super
Majority of the surviving Members. Upon the expiration of ninety (90) days after the death of a
Member, the Company shall be obligated to purchase all, and not less than all, of the deceased
Member's Membership Interest at Fair Value which the surviving Members do not elect to purchase
pursuant to the option granted in the preceding sentence. The Assignee(which may include spouse
and executors or administrators of the deceased Member) shall sell all of the deceased Member's
Membership Interest to the Company and/or the other Members in accordance with the option or
obligation established by this paragraph.
14.03 Bankruptcy of Member. If any Member becomes a Bankrupt Member,the Company
shall have the option, exercisable by notice from the Managers to the Bankrupt Member (or its
representative) at any time prior to the one hundred eightieth(180th) day after receipt of notice of
the occurrence of the event causing it to become a Bankrupt Member,to purchase all or any portion
of the Bankrupt Member's Membership Interest at Fair Value(determined as of the date that notice
of the exercise of such option is given by the Managers); provided, however, the exercise of said
option shall require the approval of a Super Majority of the other Members. In the event that notice
of the exercise of such option is given by the Managers to the Bankrupt Member (or its
representative), the Bankrupt Member shall sell its interest to the Company as provided by this
Article.
14.04 Insufficient Surplus. If the Company shall not have sufficient surplus to permit it
lawfully to purchase the Membership Interest under paragraph 14.01, 14.02 or 14.03 of this
Agreement at the time of the closing, the other Members may take such action to vote their
respective Membership Interests to reduce the capital of the Company or to take such other steps as
may be appropriate or necessary in order to enable the Company lawfully to purchase such
Membership Interest.
14.05 Option by Other Members. If the Company fails or declines to exercise an option
to purchase a Membership Interest of a Member as provided by this Agreement within the period of
time specified for such option,then the other Members shall have the option for a period of ninety
(90)days thereafter to purchase such Membership Interest in such proportions as they mutually agree
or in proportion to their respective Percentage Interests for the same price and upon the same terms
available to the Company.
14.06 Exercise of Option. Any option to purchase a Membership Interest as provided by
this Agreement shall be deemed exercised at the time the purchasing party delivers to the selling
party written notice of intent to exercise such option along with an initial payment in the form of a
certified or cashier's check in the amount of ten percent (10%) of the estimated purchase price
anticipated by the purchaser, in person or by United States registered mail, properly stamped and
addressed to the last known address of the selling party.
14.07 Determination of Fair Value. The "Fair Value" of a Membership Interest shall be
the amount that would be distributable to the Member holding such interest in the event that the
assets of the Company were sold for cash and the proceeds,net of liabilities,were distributed to the
holders of all Membership Interests pursuant to this Agreement. In the event that the Fair Value of
a Membership Interest is to be determined under this Agreement, the Managers shall select a
qualified independent appraiser to make such determination,and the Managers shall make the books
and records available to the appraiser for such purpose. The determination of Fair Value made by
such appraiser shall be final, conclusive, and binding on the Company, all Members, and all
Assignees of a Membership Interest.
14.08 Fees and Expenses of Appraiser. In the case of a purchase and sale of Membership
Interest under paragraph 14.01 or 14.02 of this Agreement (in the event of death or divorce of a
Member), the fees and expenses of such appraiser shall be paid-by the Company. In the case of a
purchase and sale of Membership Interest under paragraph 14.03 or 15.01 (in the event of the
bankruptcy or default of a Member), the fees and expenses of such appraiser shall be paid by the
Bankrupt Member or Defaulting Member,by deducting at closing such fees and expenses from the
purchase price to be paid to such Bankrupt Member or Defaulting Member,and remitting the same
to the Company. Otherwise,the fees and expenses of such appraiser shall be shared equally by the
purchaser and seller.
14.09 Right to Withdraw Option. In the event that a Member has exercised an election
to purchase a Membership Interest under this Agreement and Fair Value has been determined as
provided by paragraph 14.07 of this Agreement, such Member may elect to terminate its right to
purchase within fifteen(15)days following its receipt of the determination of Fair Value,by delivery
of written notice to the Company and to the Assignee. In such an event,the initial payment shall be
returned to the Member withdrawing the option,and the other Members may elect to purchase the
Membership Interest(or portion thereof)in such proportions as they mutually agree or in proportion
to their respective Percentage Interests.
14.10 Terms of Purchase.
(a)The closing date for any sale and purchase made pursuant to this Article shall be
the later of(i) thirty (30) days after the notice of the exercise of option has been received by the
selling party, or(ii)thirty (30) days after the parties have received notice of the Fair Value of the
Membership Interest.
(b) Payment of the purchase price for a Membership Interest may be made by the
Company and/or the other Members as follows: (1)a down payment equal to ten percent(10%)of
the Fair Value to be made at closing, and (ii) the balance of the purchase price, bearing interest at
the General Interest Rate determined on the date of closing, to be paid in twenty-four (24) equal
monthly installments,with the first payment due thirty(30)days after the date of closing. Any such
purchaser shall have the right to pay all or any part of such obligation at any time or times in advance
of maturity without penalty. In the event that the Company becomes a party to a Fundamental
Business Transaction, such obligation (or remaining portion thereof) shall be paid in full within
thirty(30) days of the date that the Company becomes a party to such transaction.
(c) At the closing, the person selling the Membership Interest will transfer the
Membership Interest free and clear of any liens or encumbrances,other than those which may have
been created to secure any indebtedness or obligations of the Company.
(d) In each event that a Membership Interest in the Company is purchased as
described in this Agreement,upon the execution and delivery of the notes or payment of the cash as
required herein, this Agreement shall operate as an automatic transfer to the purchaser of the
Membership Interest in the Company. The payment to be made to the selling Member, Assignee,
or its representative shall constitute complete release,liquidation and satisfaction of all the rights and
interest of the selling Member, Assignee, or its representative (and of all persons claiming by,
through, or under the selling Member, Assignee, or its representative) in and in respect of the
Company,including,without limitation, any Membership Interest,any rights in specific Company
property, and any rights against the Company and (insofar as the affairs of the Company are
concerned) against the Members. The parties shall perform such actions and execute such
documents that may be reasonably necessary to effectuate and evidence such purchase and sale,and
release as provided by this paragraph.
ARTICLE XV
DEFAULT OF A MEMBER
15.01 Failure to Contribute. If a Member does not contribute by the time required all or
any portion of a Capital Contribution that Member is required to make as provided in this
Agreement,the Company may exercise,on notice to that Member(the "Defaulting Member"),one
or more of the following remedies:
(a) taking such action (including, without limitation, court proceedings) as the
Managers may deem appropriate to obtain payment by the Defaulting Member of the portion
of the Defaulting Member's Capital Contribution that is in default, together with interest
thereon at the Default Interest Rate from the date that the Capital Contribution was due until
the date that it is made, all at the cost and expense of the Defaulting Member;
(b)permitting the other Members in proportion to their Percentage Interests or in such
other percentages as they may agree (the "Lending Member," whether one or more), to
advance the portion of the Defaulting Member's Capital Contribution that is in default,with
the following results:
(i) the sum advanced constitutes a loan from the Lending Member to the
Defaulting Member and a Capital Contribution of that sum to the Company by the
Defaulting Member pursuant to the applicable provisions of this Agreement,
(ii)the principal balance of the loan and all accrued unpaid interest thereon
is due and payable in whole on the tenth(10th)day after written demand therefor by
the Lending Member to the Defaulting Member,
(iii)the amount lent bears interest at the Default Interest Rate from the day
that the advance is deemed made until the date that the loan,together with all interest
accrued on it, is repaid to the Lending Member,
(iv)all distributions from the Company that otherwise would be made to the
Defaulting Member(whether before or after termination of the Company) instead
shall be paid to the Lending Member until the loan and all interest accrued on it have
been paid in full to the Lending Member (with payments being applied first to
accrued and unpaid interest and then to principal),
(v)the payment of the loan and interest accrued on it is secured by a security
interest in the Defaulting Member's Membership Interest, as more fully set forth in
paragraph 15.02 of this Agreement, and
(vi) the Lending Member has the right, in addition to the other rights and
remedies granted to it pursuant to this Agreement or available to it at law or in equity,
to take any action(including,without limitation,court proceedings)that the Lending
Member may deem appropriate to obtain payment by the Defaulting Member of the
loan and all accrued and unpaid interest on it, at the cost and expense of the
Defaulting Member;
(c)exercising the rights of a secured party under the Uniform Commercial Code of
the State of Texas;
(d) reducing the Defaulting Member's Membership Interest or other interest in the
Company;
(e) subordination of the Defaulting Member's Membership Interest to the
nondefaulting Member;
(f)a forced sale of the Defaulting Member's Membership Interest at Fair Value and
upon the terms of purchase as provided in Article XIV;
(g)forfeiture of the Defaulting Member's Membership Interest; or
(h) exercising any other rights and remedies available at law or in equity.
15.02 Security. Each Member grants to the Company, and to each Lending Member with
respect to any loans made by the Lending Member to that Member as a Defaulting Member under
this Article, as security, equally and ratably, for the payment of all Capital Contributions that
Member has agreed to make and the payment of all loans and interest accrued on them made by
Lending Members to that Member as a Defaulting Member pursuant to paragraph 15.01(b) of this
Agreement, a security interest in, and a general lien on its Membership Interest and the proceeds
thereof, all under the Uniform Commercial Code of the State of Texas. It is expressly agreed that
the security interest created thereby shall be governed by Chapter 8 of the Uniform Commercial
Code of the State of Texas. On any default in the payment of a Capital Contribution or in the
payment of such a loan or interest accrued on it,the Company or the Lending Member,as applicable,
is entitled to all the rights and remedies of a secured party under the Uniform Commercial Code of
the State of Texas with respect to the security interest granted in this Article. Each Member shall
execute and deliver to the Company and the other Members all financing statements and other
instruments that the Managers or the Lending Member,as applicable,may request to effectuate and
carry out the preceding provisions of this Article. At the option of the Managers or a Lending
Member,this Agreement or a carbon,photographic, or other copy hereof may serve as a financing
statement.
15.03 Compromise or Release. The obligation of a Defaulting Member or its legal
representative or successor to make a contribution or otherwise pay cash or transfer property or to
return cash or property paid or distributed to the Defaulting Member in violation of the TBOC or this
Agreement may be compromised or released only with the approval of a Super Majority of the other
Members. Notwithstanding the compromise or release, a creditor of the Company who extends
credit or otherwise acts in reasonable reliance on that obligation,after the Member signs a writing
that reflects the obligation and before the writing is amended or canceled to reflect the compromise
or release,may enforce the original obligation.
15.04 Expulsion. A Member may be expelled from the Company by unanimous vote of all
other Members(not including the Member to be expelled)if that Member(a)has willfully violated
any provision of this Agreement; (b) committed fraud, theft, or gross negligence against the
Company or one or more Members of the Company, or (c) engaged in wrongful conduct that
adversely and materially affects the business or operation of the Company. Such a Member shall be
considered a Defaulting Member,and the Company or other Members may also exercise any one or
more of the remedies provided for in Article 15.01. The Company may offset any damages to the
Company or its Members occasioned by the misconduct of the expelled Member against any
amounts distributable or otherwise payable by the Company to the expelled Member.
ARTICLE XVI
WINDING UP AND TERMINATION
16.01 Event Requiring Termination. The Company shall begin to wind up its affairs upon
the first of the following to occur:
(a)the execution of an instrument approving the termination of the Company by a
Super Majority of the Members;
(b)the occurrence of any event that terminates the continued membership of the last
remaining Member of the Company;provided,however,that the Company is not dissolved
if,no later than ninety(90)days after the termination of the membership of the last remaining
Member,the legal representative or successor of the last remaining Member agrees to cancel
the event requiring winding up,to continue the Company and to become a Member, or to
designate another person who agrees to become a Member, as of the date of termination of
the membership of the last remaining Member;
(c)entry of a decree of judicial dissolution of the Company;
(d) the occurrence of a nonwaivable event under the terms of the TBOC which
requires the Company to be terminated; or
(e)by the act of a Simple Majority of the Members, if no capital has been paid into
the Company, and the Company has not otherwise commenced business.
16.02 Business May Be Continued. Except as provided in paragraph 16.01(b) of this
Agreement:
(a) an event that requires the winding up of the Company's business shall not
terminate the Company if,no later than one year after the date of the event, the Members
unanimously consent to cancel the event requiring winding up.
(b) the expiration of a period of duration that requires the winding up of the
Company's business shall not terminate the Company if, no later than three years after the
date the period of duration expires, the Members unanimously consent to amend the
Company's Certificate of Formation and this Agreement to extend the Company's period of
duration.
16.03 Purchase of Former Member's Membership Interest. Upon an event requiring
winding up as provided in 16.01 of this Agreement,the Company's books shall be closed upon the
date of such event,so as to determine the Former Member's Membership Interest value on the date
ending all of the Former Member's financial interest in the Company. Within one hundred eighty
(180)days of such event, the Company shall purchase the Former Member's Membership Interest
at Fair Value (as determined by paragraph 14.07 of this Agreement), upon terms of purchase as
provided in Article XIV of this Agreement.
16.04 Liquidation. As soon as possible following an event requiring termination of the
Company,the Managers shall act as liquidator or may appoint one or more Managers or Members
as liquidator. The liquidator shall proceed diligently to wind up the affairs of the Company and
make final distributions as provided herein and in the TBOC. The costs of liquidation shall be borne
as a Company expense. Until final distribution,the liquidator shall continue to operate the Company
properties with all of the power and authority of the Managers. The steps to be accomplished by the
liquidator are as follows:
(a) as promptly as possible after such event and again after final liquidation,the liquidator
shall cause a proper accounting to be made by a recognized firm of certified public accountants of
the Company's assets,liabilities,and operations through the last day of the calendar month in which
the termination occurs or the final liquidation is completed, as applicable;
(b) the liquidator shall cause the notice described in Section 11.052 of the TBOC to be
delivered to each known claimant against the Company;
(c) the liquidator shall pay, satisfy or discharge from Company funds all of the debts,
liabilities and obligations of the Company(including, without limitation, all expenses incurred in
liquidation and any advances described in paragraph 4.04 of this Agreement) or otherwise make
adequate provision for payment and discharge thereof (including, without limitation, the
establishment of a cash escrow fund for contingent liabilities in such amount and for such term as
the liquidator may reasonably determine);and
(d) all remaining assets of the Company shall be distributed to the Members as follows:
(i) the liquidator may sell any or all Company property, including to
Members, and any resulting gain or loss from each sale shall be computed and
allocated to the Capital Accounts of the Members;
(ii) with respect to all Company property that has not been sold, the fair
market value of that property shall be determined and the Capital Accounts of the
Members shall be adjusted to reflect the manner in which the unrealized income,
gain, loss, and deduction inherent in property that has not been reflected in the
Capital Accounts previously would be allocated among the Members if there were
a taxable disposition of that property for the fair market value of that property on the
date of distribution; and
(iii)Company property shall be distributed among the Members in accordance
with the positive Capital Account balances of the Members, as determined after
taking into account all Capital Account adjustments for the taxable year of the
Company during which the liquidation of the company occurs(other than those made
by reason of this clause(iii));and those distributions shall be made by the end of the
taxable year of the Company during which the liquidation of the Company occurs(or,
if later, ninety(90) days after the date of liquidation).
All distributions in kind to the Members shall be made subject to the liability of each distributee for
costs,expenses,and liabilities theretofore incurred or for which the Company has committed prior
to the date of termination and those costs, expenses, and liabilities shall be allocated to the
distributee pursuant to this paragraph. Upon completion of all distributions to the Member, such
distribution shall constitute a complete return to the Member of its Capital Contributions and release
all claims against the Company. To the extent that a Member returns funds to the Company,it has
no claim against any other Member for those funds.
16.05 Deficit Capital Accounts. Notwithstanding anything to the contrary contained in this
Agreement, and notwithstanding any custom or rule of law to the contrary, to the extent that the
deficit,if any,in the Capital Account of any Member results from or is attributable to deductions and
losses of the Company(including non-cash items such as depreciation), or distributions of money
pursuant to this Agreement to all Members in proportion to their respective Percentage Interests,
upon termination of the Company such deficit shall not be an asset of the Company and such
Members shall not be obligated to contribute such amount to the Company to bring the balance of
such Member's Capital Account to zero.
16.06 Certificate of Termination. On completion of the distribution of Company assets
as provided herein,the Company is terminated,and the Managers(or such other person or persons
as the TBOC may require or permit)shall execute,acknowledge and cause to be filed a Certificate
of Termination, at which time the Company shall cease to exist as a limited liability company.
ARTICLE XVII
AMENDMENT OR MODIFICATION
17.01 Amendment or Modification. This Agreement may be amended or modified from
time to time only with a written instrument executed by a Super Majority of the Members.
17.02 Special Provisions for Certain Amendments or Modifications.
(a) An amendment or modification reducing a Member's Percentage Interest or
increasing its Capital Commitment (other than to reflect changes otherwise provided by this
Agreement)is effective only with that Member's consent.
(b)An amendment or modification reducing the required Percentage Interest or other
measure for any consent or vote in this Agreement is effective only with the consent or vote of
Members having the Percentage Interest or other measure theretofore required.
(c)An amendment to establish the relative rights and preferences of the Membership
Interests of any class or series may be made by a committee of Managers, within the authority of
Managers or otherwise provided in the Certificate of Formation, the TBOC, or resolutions by
Members forming the committee.
(d)An amendment or modification made solely to reflect the admission or withdrawal
of a Member(such as to Exhibit A)need not be approved by any Member if the requirements set
forth in this Agreement with respect to the admission or withdrawal of the Member are otherwise
satisfied.
ARTICLE XVIII
GENERAL PROVISIONS
18.01 Construction. Whenever the context requires,the gender of all words used in this
Agreement includes the masculine, feminine, and neuter. In the event there is only one Member,
then references to Members in the plural should be construed as singular;likewise,in the event there
is only one Manager,then references to Members in the plural should also be construed as singular.
18.02 Offset. Whenever the Company is to pay any sum to any Member,any amounts that
Member owes the Company may be deducted from that sum before payment.
18.03 Notices. Except as expressly set forth to the contrary in this Agreement,all notices,
requests,or consents provided for or permitted to be given under this Agreement must be in writing
and must be given either by depositing that writing in the United States mail, addressed to the
recipient,postage paid,and registered or certified with return receipt requested or by delivering that
writing to the recipient in person,by courier,or by facsimile transmission;and a notice,request,or
consent given under this Agreement is effective on receipt by the person. All notices,requests,and
consents to be sent to a Member must be sent to or made at the addresses given for that Member on
Exhibit A or such other address as that Member may specify by notice to the other Members. Any
notice,request, or consent to the Company or the Managers must be given to the Managers at the
following address:
4411 Hearst, College Station, Texas 77845
Whenever any notice is required to be given by law,the Certificate of Formation or this Agreement,
a written waiver thereof, signed by the person entitled to notice, whether before or after the time
stated therein,shall be deemed equivalent to the giving of such notice.
18.04 Entire Agreement; Supersedes Other Agreements. This Agreement includes the
entire agreement of the Members and their Affiliates relating to the Company and supersedes all
prior contracts or agreements with respect to the Company,whether oral or written.
18.05 Effect of Waiver or Consent. A waiver or consent,express or implied,to or of any
breach or default by any person in the performance by that person of its obligations with respect to
the Company is not a consent or waiver to or of any other breach or default in the performance by
that person of the same or any other obligations of that person with respect to the Company. Failure
on the part of a person to complain of any act of any person or to declare any person in default with
respect to the Company,irrespective of how long that failure continues,does not constitute a waiver
by that person of its rights with respect to that default until the applicable statute-of-limitations
period has run.
18.06 Binding Effect. Subject to the restrictions on Transfers set forth in this Agreement,
this Agreement is binding on and inure to the benefit of the Members and their respective heirs,legal
representatives,successors,and assigns. However,unless and until properly admitted as a Member,
no Assignee will have any rights of a Member beyond those provided expressly set forth in this
Agreement or granted by the TBOC to assignees.
18.07 Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF I'EXAS,EXCLUDING
ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE
GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF
ANOTHER JURISDICTION.
18.08 Severability. If any provision of this Agreement or the application thereof to any
person or circumstance is held invalid or unenforceable to any extent, the remainder of this
Agreement and the application of that provision to other persons or circumstances is not affected
thereby and that provision shall be enforced to the greatest extent permitted by law.
18.09 Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each Member shall execute and deliver any additional documents and
instruments and perform any additional acts that may be necessary or appropriate to effectuate and
perform the provisions of this Agreement and those transactions.
18.10 Waiver of Certain Rights. Each Member irrevocably waives any right it may have
to maintain any action for dissolution of the Company or for partition of the property of the
Company.
18.11 Indemnification. To the fullest extent permitted by law, each Member shall
indemnify the Company, each Manager and each other Member and hold them harmless from and
against all losses, costs, liabilities, damages, and expenses (including, without limitation, costs of
suit and attorney's fees)they may incur on account of any breach by that Member of this Agreement.
18.12 Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if all signing parties had signed the same instrument.
ARTICLE XIX
NOTICES AND DISCLOSURES
19.01 Compliance with Regulation D of the Securities Act of 1933. THE OWNERSHIP
INTERESTS THAT ARE THE SUBJECT OF THIS COMPANY AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THE INTERESTS MAY NOT BE OFFERED FOR SALE,SOLD,
PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER
THEREOF PROVIDES EVIDENCE SATISFACTORY TO THE MANAGERS(WHICH,IN THE
DISCRETION OF THE MANAGERS, MAY INCLUDE AN OPINION OF COUNSEL) THAT
SUCH OFFER,SALE,PLEDGE,TRANSFER,OR OTHER DISPOSITION WILL NOT VIOLATE
APPLICABLE FEDERAL OR STATE SECURITIES LAWS. THE OWNERSHIP INTERESTS
THAT ARE THE SUBJECT OF THIS COMPANY AGREEMENT ARE SUBJECT TO
RESTRICTIONS ON THE SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION AS SET
FORTH TN THIS COMPANY AGREEMENT.
19.02 Notice to Members. By executing this Agreement,each Member acknowledges that
it has actual notice of all of the provisions of this Agreement, including, without limitation, the
restrictions on the transfer of Membership Interests set forth in this Agreement, and all of the
provisions of the Certificate of Formation. Except as otherwise expressly provided by law, each
Member hereby agrees that this Agreement constitutes adequate notice of any notice requirement
C
under Chapter 8 of the Uniform Commercial Code, and each Member hereby waives any
requirement that any further notice thereunder be given.
19.03 Limitation of Liability. Pursuant to Article 581-1 et seq. of the Texas Revised Civil
Statutes (the "Texas Securities Act"), the liability under the Texas Securities Act of a lawyer,
accountant, consultant,the firm of any of the foregoing, and any other person engaged to provide
services relating to an offering of securities of the Company ("Service Providers") is limited to a
maximum of three times the fee paid by the Company or seller of the Company's securities, unless
the trier of fact finds that such Service Provider engaged in intentional wrongdoing in providing the
services. By executing this Agreement,each Member hereby acknowledges the disclosure contained
in this paragraph.
IN WITNESS HEREOF, the Managers have adopted this Company Agreement and the
Members have executed this Company Agreement, as of the Effective Date.
MANAGER:
Terrence Murphy
Date signed:
..3/11/4e
MEMBER:
Terrence Murphy
Date signed: ,0/0//€4.9
EXHIBIT A
MEMBERS OF TMFIVEProperties,LLC
Initial Capital Capital Percentage
Member's Name and Address Contribution Commitment Interest
Terrence Murphy
4411 Harst CollegeeSt tion, Texas 77845 $1,000.000 100%
Z:\Clients\Murphy,Terrence(TMFNE Properties LLC)\Company Agreement(Operating Agreement)(LLC).wpd
UNANIMOUS WRITTEN CONSENT IN LIEU OF
ORGANIZATIONAL MEETING OF MANAGER OF
TMFIVE PROPERTIES,LLC
A LIMITED LIABILITY COMPANY
The undersigned, being the Manager named in TMFIVE Properties, LLC's (hereinafter the
"Company")Certificate of Formation filed with the Secretary of State of Texas,hereby adopts the
following resolutions in lieu of an organizational meeting of the Manager.
CERTIFICATE OF FORMATION
RESOLVED,that the acknowledgment of filing issued by the Secretary of State of Texas,
and the certified copy of the Certificate of Formation filed on March , 2008, are accepted and
approved in all respects; and the Secretary is directed to place same in the Company record book.
COMPANY AGREEMENT
RESOLVED, that the form of the company agreement for regulating and managing
Company affairs submitted to the undersigned is approved and adopted as the Company Agreement
of the Company.
RESOLVED,that the secretary is directed to place the Company Agreement in the Company
record book, and maintain a copy of the Company Agreement at the Company's principal office.
PRINCIPAL OFFICE
RESOLVED, that the Company's principal office be established and maintained at 4411
Hearst, College Station,Texas 77845,and that meetings of the Manager from time to time may be
held either at the Company's principal office or at such other place as the Manager may select.
OFFICERS
RESOLVED,that the following persons were nominated to the office preceding their name:
Office Officeholder
President Terrence Murphy
Secretary Terrence Murphy
Treasurer Terrence Murphy
MEMBERSHIP INTEREST CERTIFICATES
RESOLVED, that the specimen membership interest certificate proposed for use as the
Company's certificate for membership interest is adopted as the Company's form of Membership
Interest Certificate;and
RESOLVED FURTHER,that the specimen Membership Interest Certificate be appended
to the minutes of the meeting.
COMPANY RECORD BOOK
RESOLVED,that the Company,through its secretary,shall maintain and authenticate in the
Company record book the appropriate business records,including but not limited to originals,copies
or certified copies of the Company's Certificate of Formation, the Acknowledgment of Filing,the
Company Agreement,the Membership Interest transfer ledger,minutes of the meetings and of other
proceedings of the Members, Managers, and any committee established by the Managers; and
RESOLVED FURTHER, that the secretary is to maintain in the Company record book
records pertaining to the issuance and transfer of Membership Interest in the Membership Interest
Certificate stubs and Membership Interest transfer ledger respectively.
MEMBERSHIP INTEREST ISSUED
RESOLVED, that the Manager be, and hereby is, authorized to issue from time to time
authorized Membership Interests of the Company for money paid, labor done,promissory note,or
personal property or real estate or leases thereof actually acquired and upon such terms as the
Manager in the Manager's discretion may determine; and
RESOLVED FURTHER,than an offer be issued to the following to purchase one hundred
percent (100%) of the Membership Interest of the Company in the percentages and for the
consideration indicated opposite each name:
Member's Name Member's Interest Consideration
Terrence Murphy 100% $1,000.00
RESOLVED, that the Manager is authorized to issue additional Membership Interest to
appropriately qualified purchasers.
COMMENCING BUSINESS
RESOLVED,that consideration has been received for the issuance of Membership Interest,
and that the Company consequently is able to commence and transact business and to incur
indebtedness.
ORGANIZATIONAL EXPENSES
RESOLVED,that the Company treasurer be and hereby is authorized to pay all charges and
expenses incident to or arising out of the organization of and to reimburse any person who has made
any disbursement therefor.
BANK ACCOUNT
RESOLVED,that the treasurer be and hereby is authorized to open a bank account on the
Company's behalf with any banks the Manager deems appropriate.
LICENSES AND PERMITS
RESOLVED, that Company officers are directed to obtain in the Company's name such
other licenses and tax permits as may be required for the conduct of Company business by any
federal,state,county,or municipal governmental statute,ordinance,or regulations,and are directed
and authorized to do all things necessary or convenient to qualify to transact Company business in
C 0
compliance with the laws and regulations of any appropriate federal, state, or municipal
governmental authority.
OTHER STATES
RESOLVED,that for the purpose of authorizing the Company to do business in any state,
territory or dependency of the United States or any foreign country in which it is necessary or
expedient for the Company to transact business,the proper Company officers are hereby authorized
to appoint and substitute all necessary agents or attorneys for service of process, to designate and
change the location of all necessary statutory offices and to make and file all necessary certificates,
reports, powers of attorney and other instruments as may be required by the laws of such state,
territory, dependency or country to authorize the Company to transact business therein.
FISCAL YEAR
RESOLVED,that the Company fiscal year shall begin on January 1,and end on December
31, subject to change by resolution, as appropriate, at the discretion of the Manager.
CARRY ON BUSINESS
RESOLVED, that the signing of these minutes shall constitute full consent, confirmation,
ratification,adoption and approval of the holding of the above meeting,the actions hereby taken,the
resolutions herein adopted and waiver of notice of the meeting by the signatories,
Dated: March 10 ,2008
<...---7------
Terrence Murphy/7
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Z laients1Murphy,Terrence(TMFIVE Investment Properties LLC)\lnartimous Written Consent-4 ganizational Meeting(LLC).wpd
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UNANIMOUS WRITTEN CONSENT IN LIEU OF
ANNUAL MEETING OF MEMBERS OF
TMFIVE PROPERTIES,LLC
A LIMITED LIABILITY COMPANY
The undersigned hereby adopts the following resolutions in lieu of an annual organizational
meeting of the Members.
RESOLVED,that the minutes of the last annual Members'meeting were approved.
PROCEEDINGS AND ACTIONS
RESOLVED, that all proceedings of the Company's governing authority and all actions
taken by the governing authority reported to the undersigned are approved and ratified as being
actions taken by this Company, on behalf of this Company, and for the benefit of this Company.
FINANCES
RESOLVED, that the financial, operating and other reports concerning the Company
presented to the undersigned are approved and ratified.
SALARIES,BONUSES AND OTHER COMPENSATION
RESOLVED, that the salaries, bonuses and other compensation paid by the Company as
documented in the financial records of the Company are approved and ratified.
CONSENT AND CONFIRMATION
RESOLVED, that the signing of these minutes shall constitute full consent,
confirmation,ratification, adoption and approval of the holding of the above meeting,the actions
hereby taken, the resolutions herein adopted and waiver of notice of the meeting by the
signatories.
MEMBER:
Terrence M • y,
Date signed: December 15, 2009
UNANIMOUS WRITTEN CONSENT IN LIEU OF
ANNUAL MEETING OF MANAGERS OF
TMFIVE PROPERTIES, LLC
A LIMITED LIABILITY COMPANY
The undersigned hereby adopts the following resolutions in lieu of an annual organizational
meeting of the Managers.
RESOLVED,that the minutes of the last annual Managers'meeting were approved.
PROCEEDINGS AND ACTIONS
RESOLVED, that all proceedings of the Company's governing authority and all actions
taken by the governing authority reported to the undersigned are approved and ratified as being
actions taken by this Company, on behalf of this Company, and for the benefit of this Company.
FINANCES
RESOLVED, that the financial, operating and other reports concerning the Company
presented to the undersigned are approved and ratified.
SALARIES,BONUSES AND OTHER COMPENSATION
RESOLVED, that the salaries, bonuses and other compensation paid by the Company as
documented in the financial records of the Company are hereby ratified and approved.
CONSENT AND CONFIRMATION
RESOLVED, that the signing of these minutes shall constitute full consent,
confirmation,ratification, adoption and approval of the holding of the above meeting, the actions
hereby taken, the resolutions herein adopted and waiver of notice of the meeting by the
signatories.
MANAGER:
Terrence Murphy
Date signed: De.-Am er 15,2009